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13 Sep 2016

Meaningful Use Cases Help Spur Spending on Internet of Things in Russia, According to IDC

FOR IMMEDIATE RELEASE, Moscow — A newly published report by International Data Corporation (IDC) forecasts that organizations in Russia will invest more than $4,033 million in Internet of Things (IoT) hardware, software, services, and connectivity this year. According to IDC’s Russia Internet of Things Market Forecast 2016-2020, based on Worldwide Semiannual Internet of Things Spending Guide, IoT revenues in Russia will post a compound annual growth rate (CAGR) of 21.3% over the 2016‒2020 forecast period, reaching about $9 billion in 2020.

From an end-user perspective, a few key verticals are currently driving IoT development in Russia. Manufacturing, transportation, and utility are the top three industries utilizing IoT solutions in 2016, accounting for over 50% of the total market in combined spending. The next largest vertical in terms of IoT investments is the government sector, in which spending is driven by Smart City initiatives.

While transportation and manufacturing lead in terms of overall IoT investments, spending levels in the insurance industry will grow two times faster than the overall market during the 2016‒2020 forecast period. Cross-industry investments, which represents use cases common to all industries, will increase by nearly 40% during this time. In addition, pilot projects with tangible results in agriculture, retail, resource industries, and healthcare will increase spending levels in these verticals.

A use case represents a detailed composition of a technology investment that is made to produce a set of end user benefits. The long-term opportunity for IoT vendors is helping to identify and create immediate and residual benefits for end users through their technologies.

The IoT use cases receiving the greatest levels of investment from Russian organizations are:

  • Production Asset Management: Helps a company to remotely track, monitor, and maintain industrial manufacturing devices that are part of the production value chain. This entails regularly assessing the equipment conditions and being able to remotely diagnose an equipment failure before it happens by analyzing the live stream of data produced by the machine (predictive maintenance).  
  • Freight Monitoring: Use of radio frequency identification (RFID), GPS, GPRS, and geographic information system (GIS) technologies to create an intelligent, connected transportation system. This system carries out the intelligent recognition, location, tracking and monitoring of freight and cargo through exchanging information and real-time communications via wireless, satellite or other channels.
  • Smart Grid (Electricity): System based on the principles of decentralized, two-directional interoperations between the various components and devices of the electrical network in real time. It serves to increase efficiency, safety, and reliability of power supply.

Looking across all industries in Russia, freight monitoring and production asset management will receive the greatest level of IoT investment throughout the forecast period, followed by manufacturing operations and smart grid projects (electricity). In addition, such IoT use cases as insurance telematics, agriculture field monitoring, omni-channel operations, and connected vehicles will post strong revenue growth over the 2016-2020 forecast period.

"IoT adoption in Russia largely depends on government support and the realization of IoT business value in the commercial sector. Technical solutions from both international vendors and local providers are in place, but end-user organizations are lacking use cases that will bring tangible results," says Elena Semenovskaia, research director with IDC Russia. "Additionally, organizations have major concerns regarding the security challenges associated with IoT technologies, and vendors should include security products as part of their IoT solutions and position them as a key enabler of IoT. Although some industries are adopting IoT faster than others, all sectors present tremendous opportunities for vendors.”

The Worldwide Semiannual Internet of Things Spending Guide forecasts IoT revenues for 12 technologies and 47 use cases across 20 vertical industries in eight regions and 52 countries. Unlike any other research in the market, the comprehensive spending guide was designed to help vendors clearly understand the industry-specific opportunity for IoT today.

About IDC Spending Guides

IDC's Spending Guides provide a granular view of key technology markets from a regional, vertical industry, use case, buyer, and technology perspective. The spending guides are delivered via pivot table format or custom query tool, allowing the user to easily extract meaningful information about each market by viewing data trends and relationships.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. To learn more about IDC, please visit Follow IDC on Twitter at @IDC.

For further information, please contact:

Yana Frolova

Senior Marketing Manager

Regions Covered


Topics Covered

Global IT and economic markets, Internet of things

Vertical Markets

RFID, Smart meter, smart grid

For more information, contact:

Yana Frolova